Emerging markets public procurement spend will triple to £452 billion

Will Green is news editor of Supply Management
13 April 2014

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14 April 2014 | Will Green

Public procurement in key emerging markets will almost triple by 2030 to be worth £452 billion, according to the CBI.

A report by Oxford Economics for the employers’ organisation said procurement spend by 12 countries including Brazil, China, Saudi Arabia and South Korea will grow on average by 5.5 per cent a year.

Demand for services will grow at the fastest rate and will overtake construction to be worth £110 billion in 2030, but manufacturing will remain the largest component with a value of £242 billion. Construction will be worth £97 billion.

According to the report the Chinese public procurement market will grow from £48 billion in 2011 to £200 billion in 2030, the greatest spend of all countries in the study, with Saudi Arabia in second place (£54 billion), followed by South Korea (£40 billion).

The six fastest growing sectors will be health infrastructure, transport services, recycling equipment, chemicals (including pharmaceuticals), telecommunications and health services.

“Overseas governments will increasingly prioritise the procurement of services over construction and manufacturing, in large part because of increasing demand for frontline public services such as public transport, hospitals, and schools,” said the report.

The CBI is calling on the UK government to help firms supplying public services to tap into foreign markets, through a number of measures including overseas trade missions and contracting agencies acting as go-betweens.

Public procurement spend in 2030:

1. China – £200 billion

2. Saudi Arabia – £54 billion

3. South Korea – £40 billion

4= Brazil –  £29 billion

4= Poland – £29 billion

6. India – £22 billion

7. United Arab Emirates – £15 billion

8. Nigeria – £14 billion

9= Mexico – £13 billion

9= South Africa – £13 billion

9= Turkey – £13 billion

12. Indonesia – £10 billion

 

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